Five Issues in Executive Disputes to Watch in 2015
In our last post, we counted down our most popular posts of 2014, from A-Rod to Walgreen. Now it’s time to take a look at the issues in executive disputes that are likely to draw plenty of attention in 2015.
1. Dodd-Frank Bounties and Whistleblower Litigation on the Rise
In November 2014, the SEC released its annual report on its Dodd-Frank whistleblower award program. The theme of the report is that Dodd-Frank is paying off – both for the SEC and for whistleblowing employees. The SEC reported that it issued whistleblower awards to more people in its 2014 fiscal year than in all previous years combined, including a $30 million bounty to one whistleblower in a foreign country. The number of whistleblower tips received continues to increase, and we expect news of more substantial awards in 2015. Meanwhile, litigation over various Dodd-Frank issues, such as whether a whistleblower claim is subject to arbitration, whether the shield against whistleblower retaliation applies overseas, and whether a whistleblower must report to the SEC in order to bring a retaliation claim, will continue to percolate in the federal courts.
2. The Supreme Court Weighs in on Employment Issues
A couple of key Supreme Court cases will address employee rights that apply across the board, from the C-suite to the assembly line. In Young v. United Parcel Service, the Court will decide whether, and in what circumstances, the Pregnancy Discrimination Act requires an employer that accommodates non-pregnant employees with work limitations to accommodate pregnant employees who have similar limitations. And in EEOC v. Abercrombie & Fitch Stores, Inc., the Court will address whether an employer can be liable under the Civil Rights Act for refusing to hire an employee based on religion only if the employer actually knew that a religious accommodation was required based on knowledge received directly from the job applicant.
3. Public Battles Between Companies and Their Execs
We spent a lot of time in 2014 on the defamation lawsuit that former Walgreen CFO Wade Miquelon brought against the company, and that lawsuit is just getting off the ground. If it doesn’t settle, the case will be one to watch in the coming year. Another executive dispute to watch is the continuing saga of Dov Charney, who is “vowing to fight … for the second time” to recover his job as CEO of American Apparel.
4. Noncompete Agreements Under Fire
Discussion about Jimmy John’s noncompete agreements, which drew a fair amount of press in 2014, won’t go away in 2015. The New York Attorney General recently requested information from the company about the reports that certain employees were required to “sign a highly restrictive employee confidentiality and non-competition agreement.” The Pennsylvania Supreme Court is also tackling a key case that will define employers’ obligations to their employees when signing a noncompete agreement in that state. With even whiskey distillers signing noncompetes, we don’t expect the flow of noncompete disputes to slow in 2015.
5. Social Media and Employment Covenants
On the other side of the noncompete debate, we’ll also be watching the intersection of social media and employment disputes. For example, in a recent case, an employer alleged that a former employee violated a noncompete agreement when she changed her profile description on LinkedIn. Employers are also beginning to allege that simple social media notifications can constitute a solicitation of business. The mix of social networking and executive disputes is definitely one to watch in 2015.